FSG Blog
May 1, 2023

Signals: Is the future of Texas the US’ future?

FSG Principals

Some say Texas is the future of the US, much as California was for the early post-World War II period. In this latest Signals installment FSG considers some of the defining trends and events extant in the Lone Star State – and asks whether they are harbingers of similar changes in the rest of the nation. 

The US in coming years will look more like the Texas in terms of racial and ethnic diversity. Today, 60 percent of the Texas population is non-white. As a nation, the US will not cross over into “majority-minority” territory until the mid-2040s. But according to sociologists Dudley Poston and Rogelio Saenz eight more states, led by Maryland, will turn majority-minority over the next 10 to 15 years. Once upon a time, that would point to clear advantages for Democrats. But recent elections have turned that thinking on its head, with Republican calls for low taxes and small government enjoying some appeal among ethnic voters from working and middle classes. 

The US in the future will likely not see the rates of economic and population growth that Texas has seen in recent years, but maybe neither will Texas. Since 2005 Texas has seen real GDP increase by 60 percent and its population increase by 30 percent. While California enjoys a productivity advantage, with a higher per capita GDP, it hasn’t had the turbocharging effect of a large increase in population, at least in recent years. And California has ironically been a victim of its own success, with many businesses and employees leaving the state for the lower property prices and taxes, and an easier regulatory environment offered by Texas. 

Texas’ economic success is not a viable model for all the US. As The Economist noted recently, no other US state enjoys the equivalent combination of energy resources, investment capital, land, labor, and low taxes. It is a remarkably broad-based success story. And what Texas has lacked in terms of a skilled workforce it’s been able to make up for by attracting domestic and international migrants, pulled in by abundant jobs, cheaper housing, no state income tax, and a uniquely upbeat Texas vibe.  

Texas itself may have to make some major investments if it is to sustain its growth model.  According to the Texas 2036 project, the state needs to make substantial investments in transportation infrastructure, public utilities and digital communications (about a third of rural Texans lack broadband connectivity), areas where it has fallen behind much of the rest of the nation.  

Coastal cities in Texas and elsewhere know they need to protect themselves from rising seas. The eventual price tag is only a guess. Since 1950, for instance, Galveston Island has seen between 18 inches and two feet of sea-level rise, depending on who is measuring. Seas are rising faster on the US East Coast and the Gulf of Mexico then on the West Coast, and the trend is accelerating. A plan for “hardening” Galveston Island against storms is conservatively estimated at $30 billion. Outside of Texas, very few states or large cities are in a position to even consider public works projects of this scale.  

Health, education, welfare and the future of Texas

“Soft infrastructure” – health care, education and public administration – will be key to sustained growth, and these are all areas where Texas significantly lags peer states.  While its lower health expenditure per capita could be explained by its lower median age, Texas nevertheless ranks 38th out of 50 states in the 2022 United Health Foundation overall health rankings. Similarly, its education spending per capita is significantly lower than the 50-state average despite significant achievement gaps with the rest of the nation. Some 60 percent of all Texas K-12 students are not performing at grade level. 

School choice has been a major priority for Gov. Greg Abbott, but Texas legislators have dealt his voucher program a setback. Across the nation 11 states have passed or introduced school choice bills in the last year. But just recently the Texas House voted decisively (86 to 52) to amend the budget and ban state funding for “school vouchers or other similar programs.” It seems that, as The Texas Tribune notes, many rural voters fear losing already modest public school funding if a voucher program was put into law. Meanwhile, Idaho, Iowa Idaho, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma, South Carolina, Utah, and Virginia have passed or are considering bills to establish or expand private school voucher programs or education savings accounts that give families public funds to pay for private school tuition. (Full disclosure: FSG facilitates scenario planning for a Texas organization that supports public school leadership development.) 

Texas may be out in front of a movement to prevent hospitals from charging fees for basic services.  Texas legislator introduced legislation prohibiting hospital outpatient clinics from charging fees for operational expenses related to preventive care or telemedicine. (“Preventive care” includes annual physicals, colonoscopies, and mammograms.) The rationale is to save patients money. Opponents claim it will cripple the operating budgets of already struggling small hospitals, especially in underserved communities. Across the US community hospitals are under stress, some closing and all under pressure to lower costs.

The doctrine of “private right of action” that is the foundation of the Texas law forbidding abortions after six weeks could be wielded by other states to target activity they oppose. The Texas law gives private citizens the power to sue women and doctors who end pregnancies. In California, it has been invoked in legislation targeting gun manufactures. In New York, legislation has been proposed that would allow individuals to pursue “any person, firm, corporation, or association that has been damaged as a result of a fossil fuel industry member’s acts or omissions… for recovery of damages.” This genie seems unlikely to go back into the bottle.

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6 thoughts on “Signals: Is the future of Texas the US’ future?”

  1. As an EU-resident (DK) US citizen (NJ), it was fascinating to read this very state-specific analysis and feel – quite oddly, given the state is Texas, famously independent and distinct amongst our states – such a curious sense of specific parallels to issues facing the EU. Sea level rise (the Netherlands, for one), the EU north-south regional divide, oil-rich EU member nations and those recovering from Russian Federation oil / gas dependencies, immigration issues, and even a movement toward state supported basic medical care. A word on gun regulation prospects emanating out of Texas would have been interesting and hoped for, but this US issue finds no EU parallel.

    • Thanks, Charles.The parallels to the EU were certainly unintentional, so thanks for illuminating them! Thanks also for noting the gap in coverage around gun regulation. The topic deserves a postscript to this blog entry. Stay tuned.

  2. The Economist has been flogging the Texas vs. California comparison, and favoring Texas as “the future” of the United States, for more than two decades (see https://www.economist.com/christmas-specials/2002/12/19/the-future-is-texas ). It feels to me like Brits living in a still partly-socialist (National Health Service, anyone?) country look from afar at the “low tax, low services” state of Texas, with the instinctive pro-business short-term outlook that caused Karl Marx to dub the Economist “the European organ of the aristocracy of finance,” and plump for that vision of the future over the (slightly, by European standards) less raw capitalism of California. But the truth is that the Texas-California contrast illustrates a possibly dangerous bifurcation of the U.S. With Republicans “winning” on things like the Dobbs decision, no matter how you feel about the issue of abortion, we are already witnessing a lower number of physicians willing to pursue medical careers in red states. Red states already lag “blue states” in measures such as number of physicians per capita, infant and maternal mortality, educational achievement, and infrastructure. Texas’ recent electrical grid disaster – largely caused by its unique refusal to link its grid to the rest of the country, a symptom of its anti-federal-government, go-it-alone philosophy – shows how that approach can have its own costs, just as the high-tax, high-service mentality in Illinois, say, has certainly cost that state in many ways. With the culture wars only getting hotter, the divide between “red” and “blue” seems likely to grow, driving an even deeper wedge between regions as time goes on. The question is not whether Texas is THE future – it fairly clearly has been *a* future. It’s whether a nation moving toward very disparate futures, depending where you live, can maintain its unity and stability for very long.

    • P.S. Texas’ (and other “red states'”) drive to make gun laws ever-more permissive is another example of how conservatives have learned how to use the courts to not only fashion policies they agree with in their own states without federal interference, but to also enforce their values upon “blue” states as well. Chicago had a ban on gun stores, on handguns, and on concealed carry prior to 2014. Supreme Court decisions threw these restrictions out. It is impossible to tell whether these decisions had any connection to the spike in gun murders in that city after a steady decline over the previous quarter-century. Gun murders rose across much of the country during the same post-2014 period, so it is impossible to assign causation. But in this one respect, anyway, Texas definitely was “the future” for places like Chicago. Whether that will prove to be good, bad, or indifferent is a matter for scenario planning.

    • Thanks, Patrick, for your comment. In preparing this blog we surveyed a range of recent reports on Texas’s economy, politics, society and culture. The Economist’s take is more nuanced and even critical than your comment would suggest. In its May 16 issue, for example, it says:

      “Texas is not a blueprint for all of America. It has oil and gas, enabling it to forgo a state income tax. Vast amounts of land help it accommodate companies’ expansion. And Texas has plenty of problems. It might be home to more Fortune 500 companies than any other state, but it also has the largest number of people who lack health insurance. Its politics have shifted to the extreme right, with rules that curb freedom (such as the abortion ban) and are at odds with the state’s traditions of small-government pragmatism (such as its blacklisting of financial firms that boycott hydrocarbons).

      “Texas’s politicians should climb out of the trenches of the culture wars and focus on what the state really needs to secure its prosperity. Astute, targeted investments in its people and infrastructure will help the Lone Star State shine even more brightly. The future of Texas, as with other states, depends on leaders taking the long view.”

      Source: https://www.economist.com/leaders/2023/03/16/why-america-is-going-to-look-more-like-texas?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=17210591673&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gclid=Cj0KCQjwr82iBhCuARIsAO0EAZyLlfFXmSFR6Yc1IWTohM4vjQV1vzX2pDhal-hwzxEzjKqhZLI71-gaAo4eEALw_wcB&gclsrc=aw.ds

      • I was going off not the most recent Texas article, but the fact that the Economist has raised Texas as a possible role model many times since 2000. Their year-end 2003 cover had a cowboy on a rocket-powered horse with the inside leader headline, “The Future Is Texas.” They have turned toward “Texafornia” since then. It’s still a narrow, dualistic, black-and-white conception.

        It’s interesting to me that these two western, arid, huge, politically diametrically opposite states are seen as the main alternatives for the future by outsiders. As a scenario planner, I would want to throw in a few more alternatives. Illinois has huge problems, but it turns out that the Census Department has undercounted their population in the last two censuses – it actually grew in population both decades. Georgia is growing and is changing in interesting ways. And of course Florida is an outlier in some ways, but it also is undoubtedly growing.

        Again, interesting that these two arid western horsey states are the two visions for the Economist. I stick with my (previously unstated) hypothesis that the editors of the Economist keep cowboy boots and ten-gallon hats and replica six-shooters in their offices, which they don after closing the curtains and locking the doors.

        Heck, California has cowboys too.

        New Jersey – nahh.


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